Zooming out on the crash: Abra's Bill Barhydt on why the crypto thesis holds

Transcript

When you see the price going up, you're afraid this is the big one and you miss the boat. And it almost is never true. What's up everybody? It's LG Det here and welcome to the Milk Road Show, the daily crypto show that is still standing and will continue to stand talking crypto every day until we're officially at zero or back to the moon. Today is February 6th, 2026. We are recording late on February 5th, 2026, and we don't know what the hell's happening. Our worst fears have come to pass in crypto and today's guest is ready to dissect it with us and also tell us how some of the largest players and institutions in the space are protecting themselves against the draw down. My guest today is Bill Barheight from ARA and we're going to dive right into this potential market bottom. Today's episode is brought to

you by some turn cryptotax chaos into confidence and bridge send stablecoin payments instantly simple, global and frictionfree. Bill, welcome to Milk Road man. >> Hey, great to see you. Thanks for having me on. >> Okay, Bill, listen. you seem like you're a veteran of this industry and also the finance industry. There's a lot going on, not just in crypto. Right off the bat, dude, what is happening? What is happening to our cryptos this week? >> So, so I've had this conversation five or six times over the last like I don't know 12 years maybe. I I guess it it keeps coming around. Um and and each time it's like, "Oh, this is the worst time ever." And and I can assure you it's not. [laughter] Uh It it probably

feels like it right now, but it's not. I've lived through multiple 70% Bitcoin draw downs. Never mind L1's. L1's didn't exist. I think the first, you know, couple of draw downs I I I I experienced. And so I think we're probably in the what 52 53% draw down range on Bitcoin. You know, tech stocks peaked about two weeks ago. They've been getting hammered. You know, gold and silver have pulled back. We're like in kind of in an everything pullback right now, uh, which is exacerbating the crypto trade. I think there's a whole bunch of things happening. It's kind of like a a convergence of of of basically. You know, you've got geopolitical mess, right? Meaning, people don't know what's going to happen

in Iran. Are they next? You know, is it's not clear what's happening in Venezuela. Are we taking the oil? Are we not taking the oil? You know, you had the the the the Japanese uh carry trade unwind. Basically, you've got Japan, China, Germany are all net sellers of US debt. Bessent desperately wants Treasury rates down. He's been unsuccessful in doing that. They they they like to blame the Fed, but that's wag the dog stuff because, you know, the basically it's bond markets are an open market, but they desperately need to pump liquidity into the system at lower rates. They need to refinance the debt. That was the original goal. That's what that's why we didn't get our cycle last year because of the hangover of the COVID money printing kept them from being able to lower interest rates at the same time

that they wanted to refinance the debt because they printed 25% of the money supply, actually more than that in hindsight of the money supply during COVID. And they need to refinance that debt on a longer term basis. Um, and and so now they're they're praying that they can do that this year. They have no choice. They have to do it this year either way. The question is at what rate? The lower the rate the better for the economy in terms of like you know spurring growth investments. There's a disconnect right now. Rates are still high. Okay. But real-time inflation is near zero. The Fed doesn't consider real time. They don't consider real time anything other than when Congress tells them we're shutting the government down.

That was like the first time ever in modern history that they actually considered real time information. Because for them when they look at the economy they go back 12 months and take like a weighted average and consider you know the the noise and and to them co overrode the noise. Now they they overshot the mark which is why we had 9% inflation. Okay. Um but they're undershooting the mark now because real-time inflation is near zero and interest rates are really high. So what that tells you is is that the cost of expanding as a business is actually very high right now. Okay. Um, but you have an AI productivity boom happening at the same time. So, what that tells us is is there's a part of the economy that's

driving huge GDP growth and everybody else is being left behind. Everyone else, that's as far as I can tell, unless you're participating in that supply chain somehow. Okay? And and so this has all led to huge fear. And when people are fearful, they just say, "You know what? I'm going to go sit on the sideline and wait till you all figure it out and then I'm happy to come back in." If I'm a a macro guy or or a swing trader, if I'm a real-time trader, I probably love this. Uh because, you know, volatility is my friend. But for everyone else, I just wait it out, right? I mean, there's there's nothing wrong if if rates are high, inflation is zero. at that point. It's a rare

instance where it actually does make a little bit of sense to hold cash for for many people, right? You know, I'm I look at this with a five to 10 year lens. So, I don't look at it that way, but I know that people who are short-term uh you know, maybe swing traders, it makes sense for them. >> I get it. It It's all about your time horizon at that point. Everything you're listening to today is also covered in our daily crypto newsletter. And on Sundays, we even recap the best parts of the entire week's worth podcasts. So, check it out at the link below. How do you but Bill how do you manage as a clearly a seasoned investor and somebody who who has a platform we'll get into in a little bit uh where people come and and put their money you know to the tune

of billions. How do you manage how do you manage emotions in times like this? Because you said you've been this has happened to you many times in the last 12 years that this does happen sometimes. And I find it's amazing that you know Bitcoin goes tops at 126 it has this 10-10 crash >> middles in the 80s and 90s for a couple months and the narrative is okay it's about to bounce back and then only once we see another draw down only now do people say it's over should I sell. What's your advice to people that are trying to man, you know, really manage those emotions?

>> The psychology of investing never ceases to amaze me. You know, if I told you like I'm I love cars. I think there you can see the little F1 model behind me on the desk. And and I love especially Formula 1. My father, you know, raced funny cars before I was born, which is insane, right? It's probably the most insane thing you can do as a human being besides get on a rocket and >> especially the safety standards whenever that was. you know, anything your chances of death every race were so insane. It's like the fact that it was measurable itself is insane if you know anything about, you know, actuary tables, right? So, okay, put that aside.

Yeah. >> Um, so look, the insanity of investor psychology has always evaded me. Meaning, meaning how do you basically explain to people, okay? So, so for example, if if if you're going to put a Ferrari for sale at a 40% discount because it's worth 250,000, but I'm going to give it to you for 150,000. They'll be lying around the block to buy that Ferrari. >> Mhm. >> Everybody will line up. Now, if you have conviction for where the markets are going and you get that Bitcoin, for example, is a, you know, limited supply long-term high demand asset, right? That represents, you know, a better form of gold because, you know, can move it around easily. And I tell you, you can

get it at a 50% discount. Everyone heads for the hills. So, so the psychology to me is kind of opposite of what it should be because we think more about consumption historically uh when it comes to fear and greed than we do about you know actually investing at a discount which which is what we should be thinking. You know, Warren Buffett was always the master of that, right? Which is, you know, I I get excited when there's blood in the water and I get fearful when there's irrational exuberance. And and it's very hard psychologically when you see the price going up, you're afraid this is the big one, and you miss the boat. And it almost is never true, right? Uh and and so that's that's what

I try to do for my clients is I I try to uh it's it's a little bit of psychology, but it's also a lot of a lot of real numbers, a lot of like look, go look at Amazon in 1998. It looked like Amazon was dead to rights, right? And that turned out to be noise in a 25 year up into the right log chart. And and so I think we're in some noise right now relative to the debasement that's going on and there's going to be a tale of two cities. Those who have assets and those who don't.

>> And you don't want to be caught as the one who doesn't. Which is why while it may be okay to have cash right now, it's not where I want to be in in the midterm at all. [snorts] >> Right. Right. Okay. Yeah, that makes sense. And that's a good I think that's a good general reminder. And I do remember at least I've been in crypto a little less time than you. But it's it's you always try and capture that feeling you have at the bottom and capture that feeling you had at the top where it just felt like it's over and on the flip side you feel like it's only going to keep going up. And I think the for me the goal is like just capture that feeling and try and remember it when you when it comes around again that that feeling is

brief. >> We say when in doubt zoom out and and it's it's it's catchy. It's punchy, but it's also accurate. If you zoom out, right, and and you give yourself the right time preference, meaning minimum five years, right, you're going to make money and and you almost can be a monkey at that point throwing darts at a dart board to make money even relative to price inflation. But the things that are going to make money probably are next-gen tech stocks, crypto, you know, certain types of assets that are limited in supply. You want to look for supply versus abundance. I believe in abundance. I'm actually wearing a a jacket that says abundance on it, right,

for the abundance event that I speak at every year. But but that but from an investment perspective, if you can print something infinitely, that's not what you want to be investing in, >> right? So, so you know, understand where where things are going and zoom out for yourself and give yourself the ability to go walk on grass and understand that in a 5-year timeline, um, I'm fine. >> What What are your clients telling you these days, Bill? Like, are they are they backing up the truck with whatever powder they have left, looking under the couch cushions for anything spare to get in at Bitcoin at whatever whatever was at today, like 65.

>> Yeah. Yeah. We have three types of clients, right? So, we have the clients that just want a very simple allocation to some crypto portfolio. They don't want ETFs. They want to they want inkind holdings and they don't want to keep assets on an exchange. So, they like our vault model. It's very safe. Your assets are held onchain. You can see them on chain. You're not there's no comingling. You retain title, which means you're not on my balance sheet. That's the very simple I want exposure to this space as a high net worth investor or family office. And we have a lot of those clients, you know, combination of Bitcoin Ethereum Salana Sooie Aptos what what XRP, whatever, whatever they believe belongs in that portfolio. We have a a set of clients who have become kind of crypto wealthy over the years

because they started out with Bitcoin at you know a few thousand as 5% of their portfolio and now it's become 65% of their portfolio and they don't want to sell because they have conviction or maybe they want to sell a little bit but they want to access more of the gains and so they'll borrow against the value of their Bitcoin andor Ethereum now maybe even Salana portfolios um at a relatively low conservative LTV. And as the price appreciates over many years, they can actually draw down more against the loan. So it becomes kind of a taxefficient vehicle for accessing your crypto gains almost in like a a very, you know, simple but effective money market like model because you retain

title to those to those Bitcoin. You just can't withdraw them all while you're holding the loan beyond a certain LTV and you can just keep drawing cash down. That's what I do. I keep Bitcoin in my my ABRA vault and I just draw down cash as a loan and I keep the LTV as low as I can. If the price drops precipitously, you know, you'll get warnings from ABRA, hey, your LTV is too high. You may need to add more collateral. It's that simple. That's the second type. And then the third type is the institution that that needs help. RAAS, uh other wealth managers in the future, hopefully banks who want to offer this to their clients. Okay, we have the ETF now, but we need first of all, we realize that everything you're

doing is the basis for the future of wealth management because all assets are going to be managed the way you manage assets today. They're going to be tokens in a vault. And I'll be able to borrow against my Apple shares, which are tokenized, or my Tesla shares the same way I'm borrowing against my Bitcoin. And as the RAAS are learning this, they're like, "Oh my god, we don't have the systems for this. We don't have the capabilities for this. I I I barely can keep up with the last generation of AI, you know, bots doing portfolio uh analysis. Now you're telling me everything's going to be tokenized and I'm dealing with Schwab's custody system. What am I supposed to do? And so that's where I think Abra is that's probably our biggest long-term opportunity as a company is becoming the

platform, the wealth management platform for for the tokenization of everything. It just starts with native crypto and then it becomes equity. It becomes real estate. It becomes bonds. It becomes commodities and and that is that's a you know $50 trillion in in assets today probably growing to a hundred trillion all moving onchain. It's not hyperbole. It's it's it's it's the way the system should work, right? Stock markets are closed more than they're open. That makes no sense, right? Crypto is to open 24 hours a day. Why would you want to buy an ETF unless it's for a small amount in a 401k in something that you may need to urgently sell on Sunday and

can't because it's an ETF, right? And and so that makes no sense to me. It never did. I look I I'm fine with the existence of ETFs. If you want to create rappers around, you know, Bitcoin to move it around, whether it's Wrap Bitcoin for loans or securities, ETPs, it's all good to me. I'm just saying like I think that there's a reason why the markets are going where they're going and it's about the tokenization of everything and Bitcoin is just showing us that those tokens can be used as the basis for a new banking system. But soon it's going to be Tesla shares, digital gold, real digital gold, not just Bitcoin, it's digital gold, silver, other commodities, oil, tokenized real estate. you'll be able to borrow against the title in your home as a token as

opposed to a traditional heloc because you know you can basically create a secondary market uh for for that heliloc now once it's tokenized which is much more efficient than the current process for uh how uh warehouse loans are used to finance helock loans for example. So, so long-winded way of saying we're setting ourselves up to be that wealth management/banking platform of the future for all of these RAAS, hopefully banks, etc., etc., and with the legal framework necessary around our company and the technology framework to do that.

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Got it. We've, you know, it's funny is we we've had a lot of that kind of coverage on our show this year. Um, in 2026, we had the CEO of Figure Markets on the on the show to explain that to us uh shortly after they launched as well. There's a lot of that's definitely somethingatic. One question I often have for this bill is that you know for retail investors more more passive folks like us who are not uh involved in finance in the same way we know this is happening. We look at the charts we see this massive RWA curve that is unchanged in weeks like this.

Right. >> Yep. >> As an investor what what are we supposed to do with that? You know what I mean? How are we identifying that? Are we just looking for the companies that are the ones doing that and if they have a token like how do how do we navigate that? >> Yeah. So, so beyond for me personally beyond my Abberra shares obviously is the largest individual shareholder of Abra but but I look at um what are the L1 platforms that are going to be used to facilitate this? How does AI fit in? Right? And so there's a few bets that I've personally made you know to that end. like I hold sooie, I hold Solana, I hold Bitcoin as kind of my beta, my personal beta uh for investing.

Basically, when I make an investment decision, I look at liquidity like likely path to liquidity and measure that versus Bitcoin >> in terms of both return potential, path to liquidity, access to my capital, etc., etc. And it has to beat Bitcoin handily in order for me to consider that investment right now. Um, and I do some to some investing, you know, where it doesn't necessarily meet that criteria, but it's me being a good steward of things I believe in, even though I think I could make money. Uh, but it's probably even riskier for me than holding Bitcoin, uh, you know, as a as a venture style bet. And so, so, but I look at like those L1s, right? Those L1s I think are going to get massive traction as the AI, right, RWA

uh, uh, nar narratives merge over the next year. And I think they are you're going to see um you know basically L1's get adopted for all kinds of AI uh you know roboot style applications. You're going to see again this tokenization movement gain speed. I think you know Ethereum has created a bit of a problem for itself but I think it's going to work through that right I think Vitalik is finally saying some of the right things around the architectural decisions that they made. And I I railed against the the L2 model 5 years ago. I said this is a huge mistake. You're adding complexity that is unnecessary.

And then Solana and and you know Apto Suie and Algarand I just joined the board of Algarand as chairman because I really believe that there's some upside here for them to focus on this kind of AI developer community going forward. But that whole L1 scalable L1 trade is like not really on people's radar right now to the extent I think it should be. Um, and I'm super bullish on it. Yeah, >> I I think one of the issues is that it's it seems really crowded, right? And one, you know, this is my second cycle and definitely a narrative that's developed for me this time around is like there's a lot of chains, you know, and even the options you gave us, it's like yes, they're all working towards that. the

Alerranss, the Aptos, the Sooie and Salanas, but and and like you're saying, well, Ethereum, they can get it together here and Vitalic is clearly changing the narrative a little bit. They're also a really hot competitor. Um, we had the we had um Evolve from Canton the other day on the show to discuss what he's doing. So, there's a lot of places here where people could, I guess, buy the token, look for bottom of the token in this in the short term or even long term just inspect those chains. How would you identify winners amongst them when they're all kind of promising that they're doing the same thing and they're all signing deals at a time like this, >> right? Right. So that's that's the that gets to the heart of the matter. Right.

So so yes, there's a massive number of investment opportunities in the crypto space and it's very difficult for somebody to know if they're going to have a little bit of like even gambling money, what do I what am I looking at? What am I really doing here? And so I kind of look at it like it's mostly noise for the average investor. So >> um for example like application level tokens I think certain VCs who know what they're doing users who use the product and and people who maybe pay attention to this space all day have a chance if they if they know like in the last few months we had the kind of perp dex trade right which was just last summer it had

its moment it was massive right I mean I was at uh the the conference for um I think it was um hype hyperlquid and there was a line around the block to get in in Singapore. I was like, I couldn't believe this is insane. Anyway, my point is like it's very hard to pick winners at the application level for the average investor when we're this early. Okay? And I think I think your your chances of being smarter than everyone else and getting in at the right time and getting out and timing all of that, I think your chances are are are not great to put it bluntly. Okay. Now, we have clients that do that because they, you know, they they get conviction and they do their homework or they talk to us. But I still think the L1 trade, which is a much

narrower field, I I'm not interested in the L2s. I I I think that they're either going to be usurped by Coinbase or die a horrible death. Um or both. I, you know, or or all die, including Bass. I don't know. But it's not an area where I spend a lot of time personally in terms of investing. I really think the opportunity is in Bitcoin and and a basket of like the five to 10 L1s. So very to make it simple like I try to filter out the noise. I focus on what developers are likely going to be doing or are doing in real time, right? And developers are basically flocking to Salana, Suie, Aptos, or at least they were before the kind of AI uh craze went

into hyperdrive in December. I'm seeing a lot of developers who are spending time in both worlds right now. Um, you know, I spent a lot of last weekend playing with Open Claw, setting up my own personal Jarvis and seeing what it can do and, you know, getting back to like, oh my god, I got to set up APIs for this and that and, you know, I have a degree in computer science, but it's been a minute, you know, so I had to I had to basically relearn some and I was like, wow, okay, this is not prime time ready, but when you if you have the technical chops, it's amazing where we are now. and and I think that you're you're seeing a flurry of activity from Solana and Sooie and others to be part of that play, right? Algran has published some interesting stuff if you

follow their Twitter feed recently. So, so I think the the the five or six big L1s are going to be tripping over each other to basically get a front row seat to that nextG agentic uh you know AI game. >> Okay, that's good. That's good. this good broad advice and and a good a good uh scope of of how that's all going to play out. Um and and I I think it's really worth noting and we were talking just so people know it's it's almost 3:00 Eastern on February 5th and some of the chains that Bill is talking about. Suie is below is like at 93 cents I think >> I wish I had a truck of cash for Sooie right [laughter] now.

>> Oh my god. Salana [clears throat] I think is I think it's rare I I feel I hope rarely that we do these types of shows where we're actually live during these these obscene like draw downs that seemed impossible you know until recently. Yeah. Salana at 82 is something that I think was just just unbelievable. Um Bill let's bring let's bring this back to market talk because I think that that's what you know it's it's so noteworthy and you've given us a lot of good you know a larger kind of insight on 1010. Did something break? I think I just want to get kind of your your opinion because a lot of these rumors and even just looking at the sooie chart right now it's almost down to the price of that 10-10 wick where a lot of coins got liquid they got had this huge like bounce um that seemed

like hey something broken their liquidity briefly but now it's well below that wick >> it's below it's below that amount >> well I'm looking at the Coinbase chart I think the Binance chart went down like you said to a dollar but I'm looking at Coinbase you're right >> so so yeah I think you're right I think it is about the by the Binance price something I think I think a couple of things broke and I don't know that we we will ever know for sure my feeling is is that Binance had an oracle pricing problem related to Athena where certain assets that were involved in setting up the the the collateral price for the per um we're using a unwrapped version of the price as opposed to the actual price

of the wrapped asset. And when they disconnected, it created a problem in their system and people lost money that shouldn't have been losing money. And I think Binance has been trying to make them whole. The problem is is that caused a cascading effect where everyone lost money and and so it's very easy to point to people who were in that specific trade and say, "Okay, our system was set up incorrectly." And they did admit this online. You can go back and look and they said, "Okay, we're making affected people whole." But I think the bigger problem was the cascading effect that that caused which I think probably wiped out a couple of market makers or at least caused those market makers to move their assets off or out temporarily and and the temporarily part hasn't ended yet and

and so that has drained significant liquidity from from the system. the volume of, you know, the the price movement relative to the amount of per liquidations that it's taking to move the market is way down. And so what that tells me is is that either the percentage of people holding assets in cold storage has skyrocketed recently or people have simply been, you know, saying, "Okay, I'm I'm taking my my assets off of these per systems." And they've done it. And so, you know, I think that that liquidity is going to come back, but it's going to take time.

And again, it's a variation on what we used to see in the very early days of crypto. It was like BitMX, right? You know, you'd see these these wild wicks, right? You remember the the March COVID move on BitMX, right? So, you had uh I think it was 2020 March when the price just wicked down during the day and a lot of that was basically cascading liquidations on on BitMX. So, so I think um we're looking at a modern version of that more modern six, five, six years later, but but but meaning you know other dexes, Binance, Binance allows cross collateralization for their per which other exchanges don't do at least to the extent that Binance does, which makes them one-stop shopping for most of the people who have, you know, want to

buy X on leverage using collateral Y, which other places don't allow you to easily do is my understanding. And so so they tend to be the ground zero now whereas you know seven years ago it was it was um it was BitMX right so so you know long-winded way sorry for these long answers but I think that basically that's what happened and now we've got the gold trade the AI fear uh the geopolitical stuff and and we're still within what uh January November December we're basically only 100 days from when that last event happened plus all the other stuff that's happening on top. You know, it it it feels like it's it's a little bit of an FTX moment that we're going to be recovering from

now. And um remember FTX after that it was it was more or less up into the right um once that that December bottom hit if I if I have my calendar right. And so I do think we're going to basically get a big move at some point this year. It may not come until the summer. I don't know. But with the amount of money that's going to have to come into the system given that tale of two cities I mentioned earlier, meaning the disconnect between those participating in the growth and those who are sitting on the sidelines is going to be significant. >> Let's hope so, Bill. I hope so. Yeah, I think it's uh it's it's a very unique event. And I think one of the biggest things that people are saying these days, you know, and even on our side, on our macro experts, too, is that it's

kind of hard to disseminate what exactly is happening this time, right? Because last time, like you're saying, it's like, well, FTX, you know, this massive glorified exchange, clearly had a lot of issues internally, whereas now it's still like it's a bit of a witch hunt. And a lot of things, like you're saying, a lot of it points to Binance, but that's not official information either. So, I think without concrete information, a lot of people are just looking at it be like, is crypto just doing this on its own, right? And how why is that happening when most conditions and most fundamentals are really pointing up and to the right, right? That 2026 should be this glorious year and you know 40 days in it's not.

>> The biggest problem with crypto is social media, right? I mean and I have to use it because because it's my job. I have to you know I interact with clients and I got to deal with FUD. But the reality is is that when you're basically in a buy and hold mode and things are going against you, you have you have the worst case scenario of you're looking for opopium uh when you know you're not really a trader. So you have more free time from an investment perspective and you know you basically hope you're going to find it in social media and and and social media becomes a self-reinforcing you know phenomenon regardless of what the narrative is right and right now the narrative is very negative. So, um, like I said, we've seen this before. You know, some of the players are different now, but we've we've definitely seen it

before and we're going to see it again. You know, I wouldn't be surprised if we get an epic run to 180, 190,000 and then they get a pullback to 135 and the sky is falling again. Oh my god, Bitcoin is at 135,000. Like, it's it's it's completely useless. You don't you can't get the gains without the volatility. It's not possible. it it you can't redefine math. That's the way it works. If you can't stomach the volatility, you need to change your time horizon, change your position size, or invest in something else. Those are your options.

And Bill, what what where are we at with the Clarity Act? I want to get your opinion on this because we also had this brief rally in January where it was like, okay, the the draft has come through. Some people were unhappy about it, but even when the draft came through, it was like, well, it's looking good. Crypto, we're pumping. And that was that was probably time to sell, right? It was like that was the last little pump and then now look where we're at. We're 30% plus 30 40% down from there. Is this thing going to get done this year? >> I think it is. Um so let me give you my take on where we are and and then I'll also give you my take on what I think really matters and what people should care about. Okay.

>> Uh so where I think we realistically are is that the banks are worried. They probably should be. The banks are basically given a moat around their business which is like a you know you're kned by the queen touching my shoulders for those on audio right with the sword and and now I basically have this kind of status well that status is anointed to banks who get a charter they're allowed to to lend consumer deposits they're allowed to take $1 from you and lend it six times okay I can't do that you can't do that we're not anointed to do that as a result they can lend multiple times times they can earn a net interest margin on your deposits which they generally don't share for the most

part. U you can get some of that if you lock funds up in a money market. Money markets aren't often great deals for banks, right? Because you know your assets are kind of segregated and they can't lend them six times anyway. So the point being like banks like their moat, right? They have a lot to protect within that moat framework. And it's even better. They pay a small fee to make you the taxpayer the last line of defense in acquiring their liabilities if things go bad. >> Right? That's what the FDI effectively does. It takes over the liabilities when a bank becomes insolvent. And and that's basically could you imagine how great that would be for venture business if they knew that there was a backs stop

that would acquire every liability that they had if their investments went south. That would be amazing. people would the you know venture would go to a trillion dollars and of course the economy would crash and go to zero because they would all fail and we'd have to take over all the liabilities. So so the government basically blessed Ponzi scheme of fractional reserve banking works the way it works because we believe that a run the bank isn't going to happen because there's no need because the government is backstopping the liabilities anyway. People may not be able to explain it that well the way I just did because I focus on how to explain this for a living, but they kind of intuitively get it, right? And and and so that keeps the banking system afloat, but things are starting to

break, right? Look at what's happening with gold. Look at what's happening with net sellers of our debt. Um it's it's the monetary system and the banking system is intertwined and things are starting to break. People are worried. Jamie Diamond is worried. He's yelling at Brian Armstrong at this at Davos for a reason. It's not because he doesn't like Brian Armstrong. He doesn't care about Brian Armstrong. He cares about his business and his shareholders and they're worried because if Brian can start paying 6% yield without having to be anointed, right, by the queen, that's a problem for them because now Brian is able to compete on his terms and not on their terms. And that's one of the risks to the banking system of this Clarity Act. So they say, "Oh, we're concerned about community banks losing deposits

and not bullshit." Okay, they're concerned about losing their legally appointed moat via crypto. Now, that's going to happen anyway because what's going to happen is once you have the tokenization of everything, a lot of companies will do what we do is they become an RAIA, they become a qualified custodian and they can offer 80% of what matters from a banking perspective without having to have an OC charter. Okay? Without having to worry about the FDIC, right? You know, you know, FDIC and OC have people on site at Chase, at Wells, at Bank of America full-time, full-time overseeing everything you're doing because they're the last line of of of defense on acquiring your liabilities if goes bad. Brian doesn't have that, right? So, so of

course he wants the Clarity Act. We all do, right? Now, that's the banking system's concern. I have a different set of concerns. My biggest concern, which I'm gonna say rep I think represents the broader crypto space, so a little different than how Brian looks at it, is we need a moat around the crypto space urgently to prevent what happened the last 5 years from ever happening again. >> Okay, >> it is inevitably going to happen that we're going to have somebody else again in the White House who is part of a group that believes the banking system should be socialized. Okay, I'm not I'm not opining on whether that's good or bad, although I personally think it's bad. I'm just saying it's going to

happen. That is what effectively enabled the attack on crypto to happen because you had a president who wasn't interested in the topic who basically uh you know gave over handed over the reigns of running the banking system in the US to a woman who did want the system socialized and felt that crypto was a direct threat to that. And so therefore she basically did a deal with Gendzer who wanted to be Treasury Secretary and said you kill crypto you get my vote for Treasury Secretary and I'll make sure it happens. and he said, "Okay, no problem. I got it." And he knew exactly what to do. And he did. And he was close. He came close. I think if if if if Biden Harris or Harris, you know, whoever had won, I I think, you know, a lot of the crypto space in the

US would be dead now. And and so my point is is that we need a moat, a legal moat, so that the good actors in our space who want to operate and do what's right for our country and for the world for that matter can operate without fear of death just by by existing, >> right? And that's the most important thing that the Clarity Act will do for us. So I don't want us to, you know, yeah, we it's it is important to get into the weeds of yield and um you know what's a security, what's a commodity, where does the SEC's role stop and the CFTC roles start and vice versa. That's all very important, but what's most important coming out of this is that what happened in the previous

administration cannot happen again. And and that is something that I know that the other CEOs in my space in our space will go to bat for with their time, with their wallets, which is a lesson that I hope some of the uh uh incumbents from the last administration learned their valuable lesson on uh which is that we're not going away. >> We're [clears throat] not going away quietly. We're not going away at all, never mind quietly. and and so you know they are go so so anyway you asked the question we are going to get this done and I think they're all going to be ultimately afraid of what's going to happen if they don't and they're just

pushing it out because the banking lobby has them worried in the Democratic party that they're basically giving in to crypto too easily. Now, the president, to be blunt, didn't help himself by allowing his family to create Trumpcoin and Melaniacoin and all that stuff, which they in hindsight probably wish they hadn't done. They really didn't make any money on it anyway in the big big picture. I know the Times reports this and that and the other thing. It's all nonsense, right? They just I'm guessing, they're not going to say it publicly because they don't do that. I'm guessing they wish they hadn't done it. Okay, fine. It's in the past. But, you know, we have the single best trader in in US history by far is Nancy Pelosi. I I don't hear any talk about what we're going to do to police that going forward. How is that possible? You know,

I I I've met her a few times. She's very intelligent, you know, even personable and in person. We don't agree politically, but you know, to to make thousands of percent return versus everyone else who's making dozens of percents don't add up. So, so why aren't we policing that? That is more important in my opinion to the average American consumer than Melaniacoin. Okay. So anyway, rambling, but you get the point, right? We're going to get this moat. It's essential we get the moat. There'll be some give and take around who can pay yield, how, and how it works. It won't matter to anyone in a year. And I also think, you know, even hearing you talk, it definitely feels like there will be enough progress made under this administration, regardless of

memecoins and all that kind of stuff, that even if a different administration comes along, it'll hard it'll be hard to unwind that, right? That's exactly my point. >> Yeah. just get far enough ahead that it's it's yeah that's kind of summarizing is that you have this mode whether it's clarity act or or some other form of it that then a lease gives you this kind of baseline for crypto that it can't be it can't be crushed the same way or or ever in a sense right and you've there's been so much adoption in the institutional adoption in the last few years anyways that it it would it would be really challenging I think for for that to be unwound >> um by different >> ETFs and black rockck made a huge difference Yeah.

>> And so like I I don't personally care but from an institutionalization perspective it gave credibility to the space. Look I I remember I was sitting in a meeting with one of the people who who applied for an ETF seven years ago actually now I think it's eight or eight years ago like in the very early days of Bitcoin and I said look I love you guys. I love that you're willing to be on the cutting edge here. This is not going to happen. Okay, I hate to say this to you, but an ETF is going to get approved when the person applying for the ETF looks like the person that approves the ETF. And you don't. As much as I love you guys, and you should be the first to get it because you got it first and you're willing to do great line.

>> You follow all the rules. And guess what happened? >> Guess exactly what happened. >> And and so, you know, Kathy Wood, who I love dearly, was close. She didn't look exactly like, you know, the people from Black Rockck. little little edgy, you know, a little too Bitcoiny, right? Um all of a sudden, >> what happened? Are they that much better more, you know? No, they just nobody wanted to say no to them, right? So, so, so anyway, that gave a lot of credibility to our space is what I'm saying. And and that's helping us in in indirect other ways, helping us with the RAA space. Um it's, you know, waking up people to this idea that tokenization is happening. um even though it may be incumbents and companies we've never

heard of that take a big chunk of that space later just like what happened in software right so so you know they were definitely either directly or indirectly helpful in in helping us get where we are >> got it well it sounds like there there are better times ahead Bill uh both on the the legis the legislative side and and definitely on the price side uh thank you so much for your thoughts um and uh it's been great to have you on the show man I feel like we could we could I have so many other questions I feel like we keep going, but uh time to wrap up. Yeah, for sure. >> Want insights on what's moving crypto markets and how [music] we're trading each event? Subscribe to our channel and join the Milk Growth Daily and Pro Newsletters and start investing like the

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